Michele Riffe - Hourly Price
Two months in, Michele learns that “we don’t sell time; we sell knowledge” and shares Ron’s advice that she charge for services and outcomes, then price accordingly.
To view her additional videos, please see follow these links to Follow Michele Riffe on her journey to value pricing, Month 3: The The right model and Month 4: Moving your firm in the right direction.
My primary issue that I'm working out with Ron is how do address the question of "How much do you charge by the hour?" That seems to kind of be the first question anybody asks when they're seeking out my services. Ron's response to that and with the scenario now that I use whenever I'm asked that question is "I don't" meaning I don't charge by the hour anymore. The reason I don't charge by the hour and the reason he doesn't want us to say that we charge by the hour is we should be charging for our services and outcomes. We need to identify what services it is that the client is requesting as well as the outcomes they're seeking and then we price accordingly. You have the conversation prior to even beginning to do the work, the customer has agreed to your services as well as the price that they're going to pay. Ultimately, yes, it becomes a fixed price.
We're always supposed to offer three different options, it can be based on the length of the project, it can be based on the payments terms and obviously, it also need to include the services that we're providing and the outcomes or solutions that we're providing to the customer. The most significant thing that I've gotten through Ron's training at this point is he wants us to really focus on the fact that we don't sell time, that's where the "don't track hours" comes into play, he wants us to focus on the fact that we sell knowledge.
Ron's left me with homework and the homework includes implementing value pricing. I'm also working on a script so that words flow more easily when I get a prospect's phone call or a first contact.
I have one customer in particular that we now have a one year contract, because we had the conversation upfront they understand that it's a process, kind of not a one and done, by having the value conversation and implementing value pricing with this particular customer I now have a long term established relationship with them for the level of project or the phase in the scope that we've defined, but more importantly, what I think it has done is it's put me in a position to continue to work with this client or customer long term.
Working with Ron has help me realize that even though I'm an accountant and maybe even an introvert, he's helped me become a little bit more of a salesperson. Made me recognize that having that value price conversation first does make it easier throughout the whole process and I don't have to worry about getting paid on the backend.